Home Prices Rose Dramatically In Brooklyn As Rents Continued To Fall In Q2
Rents and sale prices are going in opposite directions in Brooklyn, which could be reflective of changes in consumer behavior.
The median home price in the second quarter of 2017 rose 21% year-over-year to $795K, a new record for the borough. It is the fourth consecutive quarter Brooklyn has set an all-time record for home prices, according to a report by residential brokerage Douglas Elliman.
The increase makes Brooklyn the hottest residential market ever recorded, and the rise in price did not necessarily coincide with scarcity — new deliveries at 200 Water St., Pierhouse and others meant there were 17% more sales than a year ago, according to a Corcoran report.
Meanwhile, net effective rents in the borough dropped for the second consecutive month, according to another Douglas Elliman study as reported by The Real Deal. With concessions factored in, the median Brooklyn rent was $2,813 per month, a 2% decrease from a year ago.
Brooklyn has had 22 consecutive months of increasing rental inventory, which undoubtedly contributes to a rise in concessions as landlords compete in the tenant pool to drive occupancy rates in their new buildings.
It is also possible that the sort of consumer who can afford $3K rents can also afford a down payment on a condominium. If sale prices and rents continue to dovetail, construction in Brooklyn may finally cool down, though plenty of projects remain in the pipeline.